News
Property slow down in Spain?
Spain is still a popular destination for British property hunters, but are worries of a market bubble making some buyers anxious, asks Patricia Curmi?
Whether it's a villa in Andalusia, a townhouse in Murcia or an apartment for sale in Bilbao, Brits buying property in Spain have been happy to snap up what's on offer and the market appears to be expanding at a momentous rate.
However, financial experts have for a long time predicted a market ceiling, and with the interest rates on mortgages in the country rising to their highest rates for three years thanks to the European Central Bank (ECB) attempting to cut inflation across the eurozone it seems a levelling off of property price rises is on the horizon.
Rather than being the sudden drop and drama of a property slump, though, it is more a case of a gradual stabilising of the market. The financial monitor, Bloomberg, reports that house prices are expected to go up by 4.5 per cent in 2007, down from 10.8 per cent in the second three months of this year.
Overseas property hunters aprehensive of any market fluctuations might be comforted by the confidence of Spaniards themselves, who have traditionally placed much weight in the investment potential of bricks and mortar. Mark Stucklin of Spanish Property Insight notes a recent survey by Madrid's Chamber of Commerce which suggests local attitudes towards the property market. Only 9 per cent of respondents questioned in Madrid expected property prices to fall in future, whilst 17 per cent expect prices to stabilise. A hearty 68 per cent expect the Spanish property boom to continue, despite a surplus of unsold properties.
While it's just an indicator, consumer confidence is a good sign that there is unlikely to be the panic selling and plummeting values that might otherwise result from a market slowdown. Also, a wave of young, first-time buyers, increasing numbers of economic immigrants and the changing view of Spain from the land of a quick buck to a long-term investment are all reasons most developers and financial experts are confident the market will be robust enough to survive a property price slow-down.
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Spanish Property Insight
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19 December 2006